Sponsor-Backed PIPEs Can Aid In The Race For Liquidity

Law360 (May 20, 2020, 5:14 PM EDT) -- Private investments in public equity are currently a key focus for many market participants. The pressure on corporate balance sheets resulting from the economic consequences of COVID-19 is sending companies on a race for near-term liquidity.

Even in the best of times, sponsor-backed PIPEs may provide an attractive source of financing (and for the funding sponsor, an appealing investment opportunity) for a variety of reasons. But PIPEs are especially attractive in times of financial distress given the unavailability of traditional financing markets to many companies.

PIPE transactions tend to be particularly bespoke. Here are some key points to consider:

What kind...

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